General Motors is now one step closer to selling off the Hummer brand to Chinese company Tengzhong. Today GM announced that they are in a definitive agreement that will allow Tengzhong to acquire the Hummer brand and trademarks as well as rights to manufacture Hummer vehicles. Tengzhong will own 80 percent stake in the company and a private entrepreneur will hold the remaining 20 percent.

Part of the agreement requires Hummer to contract manufacturing and other services to GM for a period of time. The H3 and H3T will continue to be built in the Shreveport, Louisiana plant and the H2 at the Mishawaka Indiana plant until June 2011 with a possible one year extension. This is good news to the 3,000 plant workers who will continue to be employed.

Once the deal is final, Hummer is expected to offer an alternative power train in each model, E85 capability in the 2010 H3 and H3T, and the potential for a diesel engine in the H3 for markets outside of the U.S.

While the financial details were not officially announced, Bloomberg is reporting the sale is worth about $150 million, which is quite a bit less than the $500 million General Motors said it was seeking during bankruptcy proceedings. It looks like the collapse in negotiations for Saturn last week spurred GM to consider a lower price to keep this deal from falling through as well.

—Liza Barth